Wednesday, September 9, 2009
What is the Auto End Game?
As previous postings indicate, many economists were (and still are) skeptical of the auto bailouts. Further evidence that it was a bad idea via the link. The punch line: That the tax payers will not recover their money. I have two questions: Why did the US government ‘bail out’ the auto industry if they (and everyone else) knew bankruptcy was inevitable (which it was according to intrade). Question number two: What did they get ‘bailed’ out of?
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The auto industry was bailed out to first keep up the hopes of the economy being rebuilt and second to help the auto industry to improve from its mistakes. If the economy can slowly progress to the days before the economic fall, the auto industry will soon be able to get back to a point of stability. The auto industry go "bailed" out from claiming bankruptcy and causing vehicle owners and prospective vehicle owners to spend more on cars or go to foreign auto maker to satisfy their needs. The American auto makers needed to be "helped" out to help the U.S economy rebuild itself from within. Using less foreign aid in the recession of the United States economy.
ReplyDeleteMack Ryan
I think the only reason the auto industry got bailed out was because of the enormous pressure from the common people in America. Regular, lower and middle working class families in America often don't have all the information about the problems going on and why or why not a bail out is necessary. What those families did know, and what they latched onto, was the fact that the US government immediately bailed out the financial sector when the majority of the problems they were having was due to their irresponsible behavior in the first place. People didn't care or necessarily understand the implications that not bailing them out would result in. Therefore when it came time to bail out the workers in Detroit, Americans thought it was only fair that they were bailed out as well. Even though the economic implications were much less for the auto industry then the financial sector, it was what the people demanded. In return, we'll be paying billions of dollars in taxes for the rest of our lives because the auto industry doesn't really care to pay the government back.
ReplyDeleteFor years the auto industry was not "listening" to the changing needs of the American consumer. Why is Toyota where it is today?
ReplyDeleteA combination of fair or poorly made cars, high labor and health care costs and wild spending resulted in declining revenue. It was a disaster waiting to happen. If this was any other industry, outside of health, the government would have allowed them to just fall by the wayside. Instead, the taxpayer will be providing the "legs", i.e., tax dollars, to keep them somewhat profitable. We will all be paying for this for years to come.
How can they tell what technology will be produced in the future? Are there people working on different works of technology now? Technology is moving so rapid how can we keep up with it? In one of my other classes we watched a different video from ted.com that showed different things that may come into the classroom. I think ted.com is very interesting and cant wait for all the technology to come out.
ReplyDeleteStaci Beck
Those were exactly the questions I was thinking of in my head learning about the Auto bailout. I do not even think that it was nessesary for them to become bailed out anyway. And for what reason? If they get bailout, they lose money... and if they do not bailout... reguardless, they are going to lose money anyway. So the real question is, to me, is to lose money now, or lose money later?
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